Tension remains on North American trade front

Mexico’s steel, aluminum producers still unhappy with U.S. trade policies.

Photo courtesy of ArcelorMIttal.

Photo courtesy of ArcelorMIttal.

A Mexican government official has indicated that the country and its steel and aluminum producers remain dissatisfied with tariffs or quota proposals emanating from the United States on the two metals.

In a March 26 online article, Reuters has reported that a deputy economic minister of Mexico has called the continued reliance by the U.S. on Section 232 national security concerns as “not justified” when it comes to either tariffs or quotas on Mexican-made steel or aluminum.

According to Reuters, Mexican Deputy Economy Minister Luz Maria de la Mora told reporters that “quotas make no sense” as a way to manage trade and that “what industry in North America needs is the elimination of this tariff and not managed trade.”

The 25 percent U.S. tariff on Mexican and Canadian steel and the 10 percent tariff on aluminum from those nations has been a source of complaint from Canada and Mexico since they were imposed in June 2018.

The governments and producers in the two nations had thought the renegotiation of the former NAFTA (North American Free Trade Agreement) into the new USMCA (U.S.-Mexico-Canada Agreement) would result in the tariffs being canceled, but so far the Trump administration has not done so.

Instead, the U.S. government Office of the U.S. Trade Representative (USTR) has indicated it is formulating a plan that will lift the tariffs but then impose tonnage quotas on imported Mexican and Canadian steel and aluminum, it has been widely reported.

As of late February, Mexico City-based steel industry trade association Canacero was urging the Mexican government to convey the ongoing displeasure of its member companies with the U.S. policy.

In a Feb. 26 letter to Mexican President Andrés Manuel López Obrador and two other government officials, Canacero referred to the 25 percent U.S. tariff on steel as one that “America unfairly imposed on our exports.”

Canacero continues, “We also agree with the position of the Ministry of Economy that Mexico should be excluded from Section 232 [and] demand that the United States exclude Mexico from Measure 232, which penalizes our industry unfairly.”

The organization adds in its letter to Obrador, “In parallel, we need to work together and look for long-term solutions,” concluding, “We are a sector committed to Mexico, with our 700,000 employees and communities that accompany us, as well as with the extensive and successful value chain between suppliers and customers, of which we are part.”